Tax risk assessment
The customer’s new chief accountant hit some roadblocks in assessing tax and accounting practices due to the geographically distributed nature of the company, and decided to seek support from SCHNEIDER GROUP. Our review helped to identify irregularities and possible penalties, and our experts were able to develop principles for a systematic approach to risk management in finance and taxation.
Food importer, importing bakery ingredients into Russia for resale to a factory in the CIS. The company's network of customers has grown significantly over the last few years, and it has developed business ties with customers in neighbouring countries as well.
The business was expanding into new countries with different tax requirements, which meant new difficulties and risks.
The newly appointed chief accountant had a lot of concerns about tax risks, so the company asked SCHNEIDER GROUP to conduct a tax and accounting review of the entire business structure and certain contracts.
The company used a simplified taxation system that applies to small and medium-sized businesses in Russia, but it was not registered as such SCHNEIDER GROUP:
- Checked up on the group's tax liabilities to ensure that it was in compliance with tax rates, provisions and policies regarding deferred tax assets and liabilities.
- Assessed the rationality of credit and valuation liabilities decisions, discovering some discrepancies and tax risks.
- Determined that the customer's business is subject to waste disposal regulations and is required to pay an environmental levy and submit the prescribed reports.
- Reviewed controlled transactions in accordance with currency control requirements and made some optimization recommendations.
- Examined the customer's compliance with labour law and personal data protection requirements, and made recommendations to develop in-house policies and procedures in this area.
Some disadvantages found during the assessment as well as the need for a systematic approach to risk management in terms of finance, taxation and compliance have resulted in more robust monitoring of the company's accounting and tax reporting practices, and have ensured that the company does not face financial penalties for non-compliance.